What Are Roth Conversions?

Roth conversions offer a powerful way to provide tax-free growth and withdrawals in retirement, but success depends on careful planning. 

By transferring funds from traditional IRAs or 401(k)s into a Roth IRA, you can manage taxes upfront. Allowing your investments to grow without future tax obligations. The key to maximizing these benefits lies in timing and understanding how tax brackets, estate planning, and asset allocation all play a role.

Matt Nelson, CFP® and Jacob LaRue, CFP® provide insights on how to leverage Roth conversions effectively, ensuring your financial decisions align with your long-term goals. Whether you’re in your working years or nearing retirement, this episode helps you avoid common pitfalls, reduce tax burdens, and set up a strategy that benefits both you and your heirs.

Key Highlights for How Roth Conversions Work:

• Roth Conversion Basics:
  • Understand the differences between conversions and contributions, and the key tax implications to look out for
    • Learn how Roth IRAs differ from traditional retirement accounts, with after-tax contributions and tax-free withdrawals in retirement
• Tax Bracket Optimization:
  • Learn how to time your conversions during low-income years and avoid higher taxes during your peak earning periods
• Asset Allocation Strategies:
  • Discover why Roth IRAs are ideal for high-growth investments, maximizing your tax-free gains
• Estate Planning Benefits:
  • Learn how Roth conversions can lower the tax burden for your heirs, especially if they are in higher tax brackets
• Mistakes to Avoid:
  • Plan for estimated tax payments, and stay up to date on recent rule changes for inherited IRAs
• Charitable Giving Considerations:
  • Find out why Roth conversions may not be ideal if your IRA is intended for charitable donations
• And much more!

Resources:

• Ep.23: How Roth IRAs Work
• Article: Why Should I Consider a Roth Conversion?
• Chart: Should I Consider Doing A Roth Conversion?

Listen Now!

Apple Podcasts → https://bit.ly/3GGW1Da

Spotify → https://bit.ly/3TofDDW

About Matthew Nelson

Matt has over 20 years of experience in the financial services industry. He is passionate about helping MedTech professionals maximize their benefits, reduce their taxes, and plan for financial freedom. As the Founder, Managing Partner, and Senior Financial Advisor at Perspective 6 Group, he leads a team of dedicated professionals. The team provides comprehensive and personalized financial planning and investment management services to our clients.

As a CERTIFIED FINANCIAL PLANNER™ (CFP®), Accredited Investment Fiduciary® (AIF®), and Equity Compensation Associate (ECA) Matt specializes in helping our clients navigate the complex and evolving landscape of equity compensation, financial independence, portfolio management, and income tax minimization. Further, he leverages his experience as a private equity investor at Focus Financial Network, Inc., to offer strategic insights and guidance on business succession, valuation, and exit planning. Matt’s mission is to empower our clients to achieve their financial and personal goals with confidence and clarity.